February 4, 2015 / 8:44 PM / in 3 years

Exclusive: Apollo in the lead to acquire Protection 1 - sources

(Reuters) - Private equity firm Apollo Global Management LLC (APO.N) is in advanced talks to acquire Protection 1 in a deal that could value the U.S. home security company at close to $1.5 billion, including debt, according to people familiar with the matter.

Leon Black, Chairman and CEO Apollo Global Management, LLC, takes part in Private Equity: Rebalancing Risk session during the 2014 Milken Institute Global Conference in Beverly Hills, California April 29, 2014. REUTERS/Kevork Djansezian

Apollo has so far prevailed over other interested parties in an auction for Protection 1, including ADT Corp ADT.N and Ares Management LLC (ARES.N), the people said this week, asking not to be identified because the talks are confidential.

The negotiations with Apollo have not concluded, and Protection 1’s owner, buyout firm GTCR LLC, may yet decide to sell the company to another bidder or cancel the sale altogether, the people added.

An Apollo spokesman and an ADT spokeswoman declined to comment. Protection 1, GTCR and Ares representatives did not immediately respond to requests for comment.

The potential deal underscores private equity’s love affair with the security sector. Blackstone Group (BX.N) acquired Protection 1 competitor Vivint Inc for more than $2 billion in November 2012 and took its residential solar panel unit, Vivint Solar Inc VSLR.N, public in September 2014.

Protection 1 also has its own fledgling solar panel business. It announced last month that its Brite Energy unit had partnered with MySolar IX LLC, a joint venture of Morgan Stanley (MS.N) and Main Street Power Co, to expand its rooftop power systems installation program. Brite raised more than $250 million in financing from GTCR and its partners.

Chicago-based Protection 1 provides security alarm monitoring services for residential and business customers. Those services include burglary and fire protection, access control, video surveillance and maintenance. It serves nearly 2 million customers and has more than 3,500 employees.

GTCR took Protection 1 private in 2010 for $828 million.

Reporting by Greg Roumeliotis and Mike Stone in New York; Editing by Steve Orlofsky

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